Where do we start with Kenneth Lonergan‘s “Margaret,” his followup to the critically acclaimed “You Can Count On Me.” Well, here goes. The film has been sitting in limbo for the past few years — it wrapped way back in 2005 — for a variety of reasons. Foremost, a legal battle erupted between Fox Searchlight and the film’s producer Dan Gilbert, with suits and countersuits filed, as Lonergan simply could not find the picture in the editing bay. Lonergan apparently requested further time in the editing room, while multiple editors apparently also took control of the film at various points both with and without Lonergan’s ok. Even late producer Sydney Pollack become infuriated with Lonergan’s “unprofessional and irrational behavior,” and we pretty much had figured the movie would end up as an historical curiosity rather than an actual finished film. At one point, it was rumored that 300 pages of script were shot, so no wonder he had trouble wrangling this thing into a manageable size.

Then, last year, a ray of light appeared on the horizon. Anne Thompson received word from Fox Searchlight that “we do have a finished cut by Lonergan and we plan to release the film sometime in 2011.” Well, we’re nearly halfway through the year and there’s been nothing from the studio about the film and it doesn’t even appear on their calendar for the year and as it turns out, the film still needs more work.

Doing press rounds for “Sympathy For Delicious,” Mark Ruffalo told Film School Rejects that as it stands, the film is running about three hours long but the studio wants Lonergan — who now has control of the movie again — to hack out a third before they release it. Here’s what he had to say:

[Sighs] Oh, it’s so… I don’t know. Marty Scorsese has come on now to do a pass on it with Kenneth. It was a movie that started at 186 pages. It was just a very, very finely interwoven piece of material and it’s so beautiful. When he triedels. It was beautifully shot, beautifully acted, and the writing is incredible. It’s a love story to a post-9/11 America and New York City. to cut it down, he had a very hard time. The studio was saying they wanted no more than two hours, and the rough cut I saw was a little bit over three hours long. It was absolutely incredible. It was beautiful, moving, and such a fine piece of work on so many levels. It was beautifully shot, beautifully acted, and the writing is incredible. It’s a love story to a post-9/11 America and New York City.

He couldn’t get it cut down. He had a really hard time. The studio, basically, said they weren’t going to release it. That’s where it’s been. It got tied up in lawsuits with Gary Gilbert, who tried to take the movie away and have someone else edit it behind Kenny’s back. It was a surreal, big, ugly thing. Now Kenny has got it and Marty is kinda arbitrating his cut. Hopefully, we’ll be seeing it soon.

As Scorsese heads will know, Lonergan was one of the co-writers on “Gangs Of New York” and it looks like Scorsese is trying to rescue the film from never being released. But we have to ask: can they just release the three hour version? We understand that it pretty much means box office poison but this film was never going to be a box office hit anyway and it’s certainly not lacking in star power to get people into the theater. Anna Paquin, Mark Ruffalo, Matt Damon, Matthew Broderick, Jean Reno and Olivia Thirlby feature in the film which, as Ruffalo alludes, has echoes of 9/11 survivor’s guilt, and follows the ramifications of a tragic bus accident as seen through the eyes of a high school student desperate to parse the tragedy for a deeper spiritual meaning.

With Scorsese now at work finishing up his “Hugo Cabret” we’d guess “Margaret” will get pushed yet again, this time to 2012. Scorese is no stranger to multitasking but it certainly doesn’t sound as if this will be an easy edit. Removing an hour from a film already broke Lonergan and we’re sure Scorsese will want to make sure his cuts are something the director is on board with. So another chapter in the long, ongoing saga for “Margaret.” We just hope it sees the light of day soon.